a. Explanation Closing entries: Closing entries are prepared at the end of the accounting period in order to nullify the effect of amounts in the temporary accounts and to transfer their amounts to permanent accounts. Trial balance : A trial balance can be defined as a bookkeeping worksheet wherein the balances of the ledgers of a company are brought together into the debit column and the credit column. A trial balance is prepared by a company periodically, generally at the end of an accounting period. It is usually prepared to make sure that the entries in the bookkeeping system of a company are correct and true. Prepare the closing entries as shown below. Date Particulars L/F Debit ($) Credit ($) - Sales revenue 668,200 Income summary 668,200 (To record the closing of revenue account) b. To determine To prepare: The post-closing trial balance for M Company at year-end.

2nd Edition

ISBN: 9780134730370

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Chapter 4, Problem 4.20E

To determine

To prepare: The closing entries for M Company at year-end.

To determine

To prepare: The post-closing trial balance for M Company at year-end.

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Chapter 4, Problem 4.19E

Chapter 4, Problem 4.21E

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Closing entries prepare the general ledger for use during the next accounting period. Select one: True False

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The closing entries for M Company at year-end.

Solution Summary: The author explains that closing entries are prepared at the end of the accounting period in order to nullify the effect of amounts in temporary accounts and to transfer their amounts to permanent accounts.